Harare — The crisis in Zimbabwe is having “terrible consequences” for the whole of Southern Africa by delaying the building of roads, railways and power lines, says former Mozambique president Joaquim Chissano.
Speaking at a high-level debt resolution forum on May 15 in Zimbabwe's capital, Harare, he said that since Zimbabwe is located in the centre of the region, “many regional infrastructure development plans, including roads, railways and power transmission lines have been brought to a standstill, as they have to run through the country… [C]ontinental free trade is also undermined by the situation prevailing in Zimbabwe”.
Chissano is the facilitator of a dialogue initiated by Dr Akinwumi Adesina, President of the African Development Bank (AfDB), aimed at restoring the nation's international creditworthiness by resolving the nation's almost $8.3 billion in debt and arrears.
The forum also featured remarks from Zimbabwe's President Emmerson Mnangagwa and Dr Adesina. Others who attended the event included representatives from the government, the private sector, civil society organizations, development partners and former farm owners.
During the event, Mnangagwa reassured the Zimbabwe's creditors and development partners that his administration is dedicated to implementing important reforms necessary to pay down the debt and arrears, according to an AfDB report.
Zimbabwe, said Mnangagwa, “is realizing key milestones towards moving our country forward for the good of our people”. This was “in spite of the challenges associated with the debt overhang and further exacerbated by the albatross of... illegal economic sanctions.”
Governance reforms, land tenure changes, compensating former farm owners, and resolving bilateral investment protection agreements are the three main reform pillars for Zimbabwe's implementation program, the AfDB reported.
Speaking as the official advocate for Zimbabwe's debt relief and arrears clearance, Adesina voiced grave worry over the nation's debt and a “debt accumulation from arrears that don't have an end in sight”.
It is time for Zimbabwe to resolve its debt problems once and for all, he said. Zimbabwe “cannot run up the hill of economic recovery carrying a backpack of debt on its back,” Adesina said. However, getting there would not be an easy task: “We must address history to make history.”
“Economic sanctions are driving Zimbabwe further into unsustainable debt,” he said. Since the nation lacks access to foreign funding with favourable terms, to alternative sources of income, or to less expensive financing, the debt itself is not as crippling as the arrears on the loan.
Arrears make up the majority of Zimbabwe's U.S.$8.3 billion in combined bilateral and international debt. To enhance openness and accountability, the nation now releases public debt statistics and debt payment data. Mnangagwa stated that “there is need to nurture the trust and good will which continues to grow among all parties”.
He went on to say that the country's long-term economic recovery needs a thorough arrears clearing and debt settlement procedure supported by international financial institutions and the international community at large.
Adesina said the AfDB is collaborating with the government of Zimbabwe on land reform and compensation in order to create cutting-edge financial tools and structures that can be used utilized to mobilise $3.5 billion for compensations. He issued a warning against future delays that would damage trust and confidence. So timing, responsiveness, and financial sustainability all matter, he explained.
“Work together on this proposed structure which can help leverage capital markets to fund compensations without additional debt for Zimbabwe,” Adesina pleaded to development partners.
He applauded the government increasing the security of commercial agriculture by making land titles available. He suggested that the leases be for 99 years and that they be transferrable, bankable, and financially viable.
While praising the government of Zimbabwe, Adesina said the international community and the people of Zimbabwe will be keenly monitoring the situation. This will determine the impact of re-engagement with the global community. It will also depend on a process which ensures a credible election, Adesina stressed.
Regarding electoral reforms, Mnangagwa gave stakeholders the assurance that the country has put the necessary structures in place to ensure that elections slated for August this year, will be peaceful, free, fair and credible.
“My government stands committed to consolidating constitutionalism, rule of law, good governance, and protecting constitutionally enshrined rights and freedoms,” added Mnangagwa.
Adesina said America's Zimbabwe Democracy and Economic Recovery Act (ZIDERA), which is essential for re-engaging with the United States and having sanctions imposed by the U.S. Congress lifted, needs to make concrete and measurable progress.
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Earlier in May, Adesina and Chissano travelled to the U.S. to meet officials from the U.S. Treasury, the State Department, and other U.S. agencies.
“It was very clear that there is support for this high-level dialogue,” Adesina said. He hoped “that it will translate into concrete and measurable progress on the ground to inform a consideration of the lifting of the sanctions under ZIDERA.”
In order to institutionalise organised debate on economic and governance changes to support the arrears clearing and debt settlement process, the Zimbabwean government formed a dialogue platform with all creditors and development partners in December 2022.
Earlier in 2020, Zimbabwe agreed to pay U.S.$3.5 billion in compensation to local white farmers whose land was forcibly taken by the government to resettle black families. But removing the black beneficiaries from the land could prove practically and politically difficult for Mnangagwa, who has been saying the land reform cannot be reversed, but paying of compensation is key to mending ties with the West.
Thousands of white farmers were forced from their farms, sometimes violently, between 2000 and 2001 under a government programme of land reform. The seizures were blamed for destroying the country's economy, and ruined relations with the West.
